The part of income which a firm is left with after paying interest on debt capital and dividend to its shareholders is called retained earnings. ....
Cost of this source of capital is very difficult to measure. Many methods have been suggested, but no method is clearly the best. ....
A security sold in a market place promising a fixed rupee return per period is known as a preference share or preferred stock. Dividends on preferred ....
The cost of the different sources of financing represents the components of continued cost.....
It is not an early task to determine the cost of capital of a firm. While determining the cost of capital of a firm, the funds manager is confronted w....
The determination of the firm’s cost of capital is important from the point of view of both Capital Budgeting as well as Capital Structure planning ....
Cost of capital plays an important role in the capital budgeting decisions.....
Risk with reference to capital (budgeting) investment decisions may be defined as the variability which is likely to occur in future between estimated....
There are two measures of incorporating risk in the decision – making. They are: 1) The expected value and 2) The standard deviation.....
Precautionary measures to meet uncertainty can take one or all the three following distinct forms:....
Several types of uncertainties are important to the producer, as he formulates plans and designs courses of actions for procuring resources at the pre....
Risk and uncertainty are quite inherent in capital budgeting decisions.....
Capital rationing refers to a situation where a firm is not in a position to invest in all profitable projects due to the constraints on availability ....
Equipment A has a cost of ` 75,000 and net cash flow of `20,000 per year for six years. ....
The Net Present value method and the Internal Rate of Return Method are similar in the sense that both are modern techniques of capital budgeting and ....
Another method of computing expected rates of return is the present value method. ....
This method is popularly known as pay off, pay-out, recoupment period method also. ....
The capital budgeting process begins with assembling of investment proposals of different departments of a firm. ....